Comprehensive Annual Financial Report - City of Santa Monica

needs of City infrastructure and facilities. This designation is intended to be used for major capital
repair where facility failure, unexpected hazards, or destruction of City property has occurred and
where repair or replacement is not planned within the established capital, operations, or other
replacement funds.
Capital Improvement Policies
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The City will coordinate preparation of the capital budget with preparation of the operating budget.
Future operating costs associated with new capital improvements will be projected and included in
the operating budget forecasts.
The City will identify estimated costs and potential funding sources for each proposed capital project
before it is submitted to Council for approval.
The City administration will identify, for Council consideration, the least costly financing method for
all new projects.
Accounting, Auditing & Financial Reporting Policies
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The City’s accounting and financial reporting systems will be maintained in conformance with
generally accepted accounting principles and standards of the Government Accounting Standards
Board.
A Comprehensive Annual Financial Report will be prepared and audited by a qualified independent
public accounting firm.
Investment Policies
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An investment policy will be submitted annually to the City Council for review and adoption.
The City will invest public funds in a manner that will provide a market rate of return after ensuring
optimum safety and meeting the daily cash flow demands of the City.
Cash Management Policies and Practices. The City’s Investment Policy (Policy) sets broad legal
guidelines which govern the investment of cash balances. The Policy, established in accordance with State
law, has been certified by the Association of Public Treasurers, United States and Canada. The Policy is
reviewed annually and approved by the City Council. The primary objectives of all City investments, in
priority order, are safety and preservation of principal, liquidity to meet cash flow needs, and a market rate of
return after the first two objectives have been met. Within this framework, the City has developed an
Investment Plan (Plan) which guides strategy and structure of the portfolio. The Plan sets targets for the
portfolio by investment type as well as benchmarks to measure return.
Debt Administration. At June 30, 2008, the City's general obligation bond rating was the highest possible
with an Aaa from Moody’s; AAA from Fitch; and AAA from Standard and Poor’s. All other City
indebtedness is considered to be at least investment grade. In November 2008, Standard and Poor’s upgraded
the credit rating on the City’s Wastewater Enterprise Refunding Revenue Bonds from AA to AAA. The
City’s bonded debt applicable to its debt limit consisted of: $20.1 million of Main Library Improvements
Project General Obligation Bonds; $24.4 million in Public Safety Facility Lease Revenue Bonds; $38.1
million in Civic Center Parking Structure Bonds; $76.7 million in Downtown Redevelopment Project Lease
Revenue Bonds, Earthquake Recovery Redevelopment Project Tax Allocation Bonds and Ocean Park
Redevelopment Projects Tax Allocation Refunding Bonds; and $8.3 million in Parking Authority Lease
Revenue Bonds. A calculation of the City's debt limit is detailed in Table 14 of the Statistical Section of this
CAFR.
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